When Facebook bought an Irvine-based virtual reality startup for $2 billion in March, entrepreneur John Cecil had to explain to friends and customers who called to congratulate him that none of those Zucker-bucks was coming his way.

It wasn’t Oculu, Cecil’s Aliso Viejo-based online service for uploading and managing videos, that had drawn the interest of Facebook CEO Mark Zuckerberg. It was Oculus VR, the company headquartered just a few miles away, which Cecil’s company had sued in February for trademark infringement over the difference of the “s” in their names.

“It’s an incredible product. They’re a cool company,” Cecil said of those other people.

On one level, his situation highlights the difficult choice trademark holders sometimes face – they must proactively defend their marks or potentially lose them, according to UC Irvine trademark and patent expert Dan Burk.

“The standard is likelihood of confusion, and these two marks are pretty close in spelling, and the two markets or technologies are close enough that there might be confusion,” Burk said in an e-mail. “Usually the trademark registrant sends a cease-and-desist letter, and somebody makes a change or they perhaps negotiate a license. Actual lawsuits are rarer.”

But it also shows the frustrations of having a business that’s inadvertently caught in the slipstream of a suddenly hot tech startup.

The forced explanations over the name confusion weren’t the first indignity for Cecil. After he filed the lawsuit, Cecil was inundated for weeks on the Internet with hate messages from a largely anonymous mob of Oculus fans.

Cecil said his mobile number was posted online and messages filled with four-letter words and vague threats started to roll in.

“You have awoken a sleeping giant. Suing Oculus was the biggest mistake you could have made as a company,” said one of the messages Cecil forwarded to the Register. (Oculus VR incurred similar wrath a few weeks later for selling to Facebook.)

Last year, both Oculu and Oculus appeared at a high profile Orange County venture capital conference. Instead of talking about what his business could offer for helping to manage video on the Web, Cecil found himself explaining to attendees that he wasn’t copying Oculus or the $300 “Rift” goggles they were making.

One major impact on Cecil’s Oculu has been the effect on the Google referrals that it relied on to convert some into paying subscribers. Prior to Oculus blowing up, he says, hundreds of people came each month to sign up for free trials of the video service, which serves video and advertising via a player customers can embed on websites.

Now, with Oculus news and links from all over the world hogging search results he’s only getting about half of those referrals and shrinking the pool of subscribers. If you type in the letters “Oculu” into Google, for instance, you’ll likely see a bunch of “Oculus” suggestions. Hit “enter” on “Oculu” to search and you’ll get Cecil’s company followed immediately by a string of Oculus links.

Cecil said his company’s name came from an intern who was assigned to come up with something to fit a business that was to be spun out of a video production company called Innovate Media. Among guidelines the intern was given was that the name could be trademarked and that it could be turned into an Internet domain name.

Oculu.com was registered in 2010 and the company’s trademark “for streaming of audio and video material by means of the Internet” was granted in 2011. Cecil declined to comment on Oculu’s revenue. He offered that Oculu made more than Oculus, but when a reporter presented him with a rough $20 million estimate for yearly revenues off that company’s virtual reality headgear, Cecil demurred.

“We do not do that in revenue,” he said in an e-mail. “I did not know they were selling that kind of volume.”

Oculus VR was formed in summer 2012. That began an incredible 18-month journey: from the ideas of a 19-year-old living in a trailer in his parent’s driveway, to $93 million in funding from Kickstarter and venture capitalists, and then into the welcoming arms of Zuckerberg’s Facebook.

Oculus VR registered its trademark in 2013 for “virtual reality headsets and helmets adapted for use in playing video games.” (Oculus was also sued for trademark infringement in April this year by Oculus Info, a Canadian software company.)

An Oculus spokesperson declined to comment.

Zuckerberg saw promise in virtual reality becoming a whole new communications medium. If successful, “rifting” could become the next “googling” and the 100 or so employees and contracters who work at Oculus are moving to larger offices in Irvine.

Cecil has 17 employees, some of them plugging away in an office at the TechSpace facility favored by startups in Aliso Viejo. He says he just wants to keep “ticking along and build this business like we’re building it.”

Cecil said someone contacted Oculu last year to inquire about purchasing his domain name for Oculus, but nothing came of it.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.